With that in mind, let's take a closer look at Graco and see what CAPS investors are saying about the stock right now.

Graco facts

Headquarters (founded)

Minneapolis, Minn. (1926)

Market Cap

$3.3 billion

Industry

Industrial machinery

Trailing-12-Month Revenue

$1.0 billion

Management

CEO Patrick McHale

CFO James Graner

Return on Equity (average, past 3 years)

43.4%

Cash/Debt

$457.9 million / $564.6 million

Dividend Yield

1.7%

Competitors

Colfax

IDEX

Nordson

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 342 members who have rated Graco believe the stock will outperform the S&P 500 going forward.

Earlier today, one of those Fools, All-Star Nittany95, succinctly summed up the bull case for our community:

For some reason I always keep coming back to Graco. That reason is quite simply management. They have managed to keep the balance sheet pristine through a horrific recession -- particularly in homebuilding where their sprayers and paint products find a home. ...

Now that we are seeing renewed demand and increases in aggregate economic activity, they should see an acceleration in growth and [free cash flow]. I am looking for annual dividend increases or a share buyback program that continues to expand over time.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Graco may not be your top choice.

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